Market Mood Index in ‘Fear’ Zone

Mumbai, Oct 26: Tickertape’s Market Mood Index (MMI), which tracks investor sentiment in India, stood at 34.33 on Monday, placing it in the “fear” zone. Any reading between 30 and 50 falls in this category. It suggests that investors are fearful, but the action to be taken depends on how the index moves from here. 

Indian equity benchmarks were still in the red at midday but had pared the sharp losses seen at the open. At 11:50 am, the Sensex was down 100.69 points, or 0.14%, at 73,023.14, while the Nifty 50 was down 37.25 points, or 0.16%, at 22,562.75 at 11:51 am. Both had opened much weaker, at 72,588.55 and 22,420, respectively. 

The recovery follows a bruising week. On Friday, the Sensex closed at 73,123.83 and the Nifty at 22,600, a fourth straight session of losses that snapped a two-week winning streak. Over the week, the Sensex and Nifty declined 2.2% and 2.4%, respectively. 

Crude oil remains the main pressure point. Brent crude was at $114.88 a barrel in morning trade despite a 1.58% fall, while WTI slipped 1.87% to $101.34. Murban crude bucked the trend, rising 3.16% to $118, and natural gas fell 3.94% to $2.536. For India, which depends on imported crude, prices at these levels raise concerns about the import bill, inflation and corporate margins. 

The situation in Iran is the other big worry. According to a memo seen by Reuters, US Director of National Intelligence Jay Clayton warned on October 23 that Tehran has substantially increased efforts to target US personnel, and that lethal plots against American citizens have reached advanced stages in the Middle East and other countries. Washington has scaled back staffing at its Saudi Arabia mission after intensified Houthi attacks. 

Attacks on commercial shipping in the Strait of Hormuz have also risen sharply, adding to global supply worries. The Iran war is a week away from entering its ninth month and has weighed on US President Donald Trump’s approval ratings ahead of the November 3 midterm elections. 

With the US Federal Reserve’s policy decision due on Wednesday, Brent near $115 and fresh threats in the Middle East, the direction of the index in the coming sessions will matter more than a single reading. 

How the MMI Is Measured 

Tickertape builds the MMI from six factors: foreign institutional investor (FII) activity, volatility and skew, momentum, market breadth, price strength and demand for gold. Each factor’s current value is compared with its 45-trading-day rolling average and standard deviation. The readings are normalised to a scale of 0 to 100, with equal weight for all six factors. A score below 30 falls in the extreme fear zone, 30 to 50 in the fear zone, and higher readings move through greed toward extreme greed. 

Source

• Tickertape’s Market Mood Index